Who Can Lead Us Out of This Mess?

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Another part of the job is choosing advisers, and in preparing for this moment, Obama consulted a glittering cast, including former Federal Reserve Chairman Paul Volcker — the man who whipped inflation — and former Treasury Secretary Robert Rubin, who briefly erased the deficit. Yet another role of the President is to set priorities. That's where Obama stumbled.

Asked what impact this trillion-dollar crisis might have on his expansive and expensive array of policy proposals, Obama essentially answered, Maybe none. That's defensible in theory, because each of Obama's big ideas could be, in the long run, good for the U.S. economy. Overhauling the energy sector by selling credits to emit carbon could ignite a big new industry around alternative fuels. Reforming the inefficient health-care system could rein in the cost of insurance and allow employers to put more money into wages rather than into benefits. Drastically improving education ought to lead to a more skilled workforce that produces more valuable goods and services.

But all these reforms would involve massive up-front costs, and the current crisis seems to mean that there will be less money available for the next President to invest. If you say, "Well, let's borrow some," you run into the very problem that underlies the financial meltdown in the first place. At every level of American life — from the struggling homeowner who can't afford his mortgage to the failing investment banks that can't meet their collateral requirements to the Federal Government, which can't prop up the drooping dollar — the bottom line is that we've borrowed too much money. We're all over-leveraged.

Obama has said little about how he would tackle that fundamental issue as President. Indeed, his short-term proposals — a second round of stimulus checks, for example, and some of his refundable tax credits for working families — could have the opposite effect, spurring more consumer spending. That might make voters happy and briefly goose the economy, but it won't persuade America to stop living beyond its means.

As far back as the penny-saving Ben Franklin and the conquistadores chasing their dreams of golden cities, this has been a country of mixed minds about how to get rich. We extol the conservative Warren Buffett model: selling 4 cent Cokes for a nickel and conscientiously saving the proceeds, investing in quality goods and well-run enterprises and shunning a penthouse on Central Park when a five-bedroom home in Omaha, Neb., will do. At the same time, we're always on the lookout for the next gold rush, the next Powerball, the next bubble. The fact that Wall Street banks were recently borrowing 30 or 40 times their available capital to place bets that home buyers would pay off mortgages 10 times the size of their annual paychecks suggests that America's cultural pendulum has swung too far in the direction of the casino. And Obama hasn't yet shown he's the man to put us back in touch with our thrifty side.

Who Has the Courage to Cut?
McCain strode to the microphones a short time later in Freeland, Mich., a little town near the spot where the thumb of the Michigan mitten meets the palm. The state's economy is the weakest in the country, and McCain was there to visit one of the few bright spots, a Dow Corning plant devoted to solar-power technology.

Dressed in tan trousers, a blue blazer and a striped tie — the unofficial uniform of the small-town Chamber of Commerce — McCain cut quite a different figure from his opponent. He radiated toughness with an overlay of irritation. He tried to warn us two years ago that Fannie Mae and Freddie Mac were screwed up, he began, but did America listen? Now look at the trouble we're in.

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